Creditor/Policy Holder Recovery Services- Insolvent Insurers

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When working with large commercial insurers that are distressed or in formal liquidation proceedings, the claims valuation process can become even more complex, taking years to complete and yielding uncertain final recoveries.

Some of these insurers, such as The Home Insurance Company, Kemper, Highlands and certain London Market Insurers, have become more active in negotiating claim values and have moved towards payment distributions to policyholder creditors.

However, many policyholders have submitted claims often at the claims-bar date, and have yet to agree on a claim valuation. Other policyholders have an agreed-claim value, but have yet to receive any distribution, effectively stranding the asset and locking up cash.

In the past several years, a secondary market has developed for purchasing-agreed claims, and to a lesser degree, unresolved claims.

These sophisticated buyers, often hedge funds, are willing to wait for payouts and arrange financing appropriate with this approach (unlike corporations that have opportunity cost of funds)

Buyers closely track the liquidations and know the regulatory process intimately. They are knowledgeable about the process, including general and specific recovery prospects for all major liquidations

Realizing Claim Value with Insurers in Liquidation

If the claim is not agreed, policyholders with claims against insolvent insurer coverage should evaluate and present the claim to ensure they get the maximum agreed value: